Large Optimal Group (OPMR) Holder Clinton Group Wants Special Dividend or Buyback and Sale
In an amended 13D filing on Optimal Group, Inc. (NASDAQ: OPMR), 6.3% holder Clinton Group disclosed a letter sent to the board of directors urging them to take steps to return the Company's significant cash position to shareholders in the form of a special dividend or Dutch tender offer and immediately embark on a sale of the Company.
The letter also stated that if strategic buyers do not demonstrate interest in the Company's subsidiary, FireOne Group plc, Clinton Group would consider investigating a buyout of the unit.
A Copy of the Letter:
Neil S. Wechsler
Co-Chairman of the Board and Chief Executive Officer
Dear Mr. Wechsler:
We acknowledge that the unexpected passage of the Unlawful Internet GamblingEnforcement Act of 2006 was a significant setback to the strategic business planof Optimal Group Inc. ("Optimal" or the "Company") and specifically FireOneGroup plc ("FireOne"). Obviously, the growth prospects of the business as wellas the overall dynamics of the industry have changed significantly. As such, weurge the board of directors to take steps to return the Company's significantcash position to the shareholders in the form of a special dividend or Dutchtender offer and immediately embark on a sale of the Company. The Company shouldexpand the scope of Genuity Capital Markets' engagement or engage anotherfinancial advisor to execute a sale process. We believe this course of actionwould maximize value to existing shareholders given the current industrydynamics and lack of historical trading volume. Our view is that after thedistribution of the cash, Optimal is not of sufficient size to continue as apublic entity.
In conjunction with a sale process of the Company and to the extent strategicbuyers do not demonstrate interest in FireOne, we would consider investigating abuyout of FireOne by Clinton and its affiliates, and we are prepared toimmediately commence the requisite due diligence to that end. We believe thatFireOne is trading at a level that discounts the inherent valuation of thetechnology and its growth prospects outside the U.S. market. While thefinancials were not entirely articulated in the most recent quarterly filing, itappears FireOne has approximately $25 million of non-U.S. revenues, a fact thatthe market seems to overlook.
We trust that the board under your leadership will work expeditiously toconsider and review our proposal. We believe Optimal would be an attractiveadd-on candidate to several larger transaction processors and similar portfoliocompanies controlled by private equity firms.
Our first approach is always to attempt to work constructively with managementto share ideas regarding how to deliver value for shareholders, and we havestated that we would possibly participate in certain types of transactions.However, if the board fails to expeditiously pursue our stated course of action,we would consider, among other things, seeking board representation at nextyear's annual meeting through the election of directors who, subject to theirfiduciary duties, are dedicated to maximizing shareholder value through a saleprocess. If you would like to discuss the above, you or your advisors are freeto contact me at XXX-XXX-XXXX.
Sincerely,
Conrad Bringsjord
Portfolio Manager Event Driven and Activist Investments
Clinton Group Inc.
Sign-Up for E-Mail Alerts on OPMR (Free) and 13D Filings (Premium Only)
The letter also stated that if strategic buyers do not demonstrate interest in the Company's subsidiary, FireOne Group plc, Clinton Group would consider investigating a buyout of the unit.
A Copy of the Letter:
Neil S. Wechsler
Co-Chairman of the Board and Chief Executive Officer
Dear Mr. Wechsler:
We acknowledge that the unexpected passage of the Unlawful Internet GamblingEnforcement Act of 2006 was a significant setback to the strategic business planof Optimal Group Inc. ("Optimal" or the "Company") and specifically FireOneGroup plc ("FireOne"). Obviously, the growth prospects of the business as wellas the overall dynamics of the industry have changed significantly. As such, weurge the board of directors to take steps to return the Company's significantcash position to the shareholders in the form of a special dividend or Dutchtender offer and immediately embark on a sale of the Company. The Company shouldexpand the scope of Genuity Capital Markets' engagement or engage anotherfinancial advisor to execute a sale process. We believe this course of actionwould maximize value to existing shareholders given the current industrydynamics and lack of historical trading volume. Our view is that after thedistribution of the cash, Optimal is not of sufficient size to continue as apublic entity.
In conjunction with a sale process of the Company and to the extent strategicbuyers do not demonstrate interest in FireOne, we would consider investigating abuyout of FireOne by Clinton and its affiliates, and we are prepared toimmediately commence the requisite due diligence to that end. We believe thatFireOne is trading at a level that discounts the inherent valuation of thetechnology and its growth prospects outside the U.S. market. While thefinancials were not entirely articulated in the most recent quarterly filing, itappears FireOne has approximately $25 million of non-U.S. revenues, a fact thatthe market seems to overlook.
We trust that the board under your leadership will work expeditiously toconsider and review our proposal. We believe Optimal would be an attractiveadd-on candidate to several larger transaction processors and similar portfoliocompanies controlled by private equity firms.
Our first approach is always to attempt to work constructively with managementto share ideas regarding how to deliver value for shareholders, and we havestated that we would possibly participate in certain types of transactions.However, if the board fails to expeditiously pursue our stated course of action,we would consider, among other things, seeking board representation at nextyear's annual meeting through the election of directors who, subject to theirfiduciary duties, are dedicated to maximizing shareholder value through a saleprocess. If you would like to discuss the above, you or your advisors are freeto contact me at XXX-XXX-XXXX.
Sincerely,
Conrad Bringsjord
Portfolio Manager Event Driven and Activist Investments
Clinton Group Inc.
Sign-Up for E-Mail Alerts on OPMR (Free) and 13D Filings (Premium Only)
posted by Lon at 9:59 AM
0 Comments:
Post a Comment
<< Home